Appeal from an order of the United States District Court for the Eastern District of New York (Cogan, J.) dismissing Plaintiff-Appellant's complaint challenging the decision by an ERISA plan administrator to deny his claim for a Disability Retirement Pension. We conclude that the plan administrator's interpretation of one of the eligibility requirements for a Disability Retirement Pension was arbitrary and capricious. We therefore reverse the district court's dismissal and remand with instructions to return the case to the Fund for reconsideration in light of this opinion.
The opinion of the court was delivered by: Dennis Jacobs, Chief Judge
Argued: December 23, 2008
Before: JACOBS, Chief Judge, CALABRESI and SACK, Circuit Judges.
Carmine J. Pepe brought this suit to challenge the decision by an ERISA plan administrator to deny his claim for a Disability Retirement Pension. Pepe appeals from an order of the United States District Court for the Eastern District of New York (Cogan, J.) dismissing his complaint.
Pepe is covered for disability under the Newspaper and Mail Deliverers'-Publishers' Pension Plan (the "Plan"), which is administered by the defendant, the Newspaper and Mail Deliverers'-Publishers' Pension Fund (the "Fund"). The Fund denied Pepe's claim on the ground that Pepe did not meet the Plan's requirement of having "accrued a Year of Vesting Service in the Accrual Year immediately prior to the Annuity Starting Date." The Fund construed this language as requiring Pepe to have submitted an application within one "Accrual Year" following the last "Accrual Year" in which he was credited with a "Year of Vesting Service." Pepe's last "Year of Vesting Service" was apparently the year ending January 31, 1998, and, according to the Fund, Pepe did not "apply" for a Disability Retirement Pension until 2003 at the earliest.
As discussed below, however, the Plan nowhere provides that a participant must apply within any time frame; and such a requirement would conflict with other provisions of the Plan. Additionally, Pepe alleges that he called the Fund in 1998, and was advised that he had to secure federal disability benefits before he could submit an application to the Fund. Pepe won a federal disability award in 2003. His call to the Fund promptly thereafter was treated as an application---and denied as untimely. The Fund does not explain why Pepe's 2003 phone call was sufficient to constitute an application, whereas the alleged 1998 phone call was insufficient.
From 1973 to 1992, Pepe worked as a newspaper deliverer for several employers that had entered into collective bargaining agreements with the Newspaper and Mail Deliverers' Union (the "Union"). The employers made regular contributions to the Fund on Pepe's behalf.
The Fund is an "employee benefit pension plan" within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"). 29 U.S.C. § 1002(2)(A). The Fund's Board of Trustees has sole authority to interpret and apply the Plan, and resolve all disputes concerning its operation.
While employed by the New York Post in June 1992, Pepe was allegedly rendered unable to work by an on-the-job accident. He began receiving New York State workers' compensation benefits on an interim basis. Under the terms of the Plan, so long as he received such interim benefits, he was still considered "employed," and the New York Post continued to make contributions to the Fund on his behalf. That arrangement lasted for about five years, during which time Pepe was credited with "Shifts of Service" and "Years of Credited of Service" as defined in the Plan. By the end of 1997, Pepe had accumulated twenty-four years of Credited Service.
On February 6, 1998, the Workers' Compensation Board issued a final determination classifying Pepe as "permanently partially disabled," and settled his claim for a lump sum. Accordingly, the New York Post ceased making contributions to the Fund on Pepe's behalf,*fn1 and he accumulated no further "Shifts of Service" or "Years of Credited Service."
Pepe alleges that in early 1998, shortly after the decision of the Workers' Compensation Board, he telephoned the Fund and spoke with someone named Cathy, presumably the Fund's long-serving office manager, Catherine Revy. Pepe claims that he asked her what he had to do to receive a Disability Retirement Pension,*fn2 that she told him he would first have to apply for and receive a Social Security Disability Award ("SSDA"), and that he followed her advice and applied for an SSDA.
Revy testified that she does not remember receiving a phone call from Pepe in 1998, but that, if Pepe had called, she would not have told him to get an SSDA first. Under the terms of the Plan, as we explain below, Pepe did not need to obtain an SSDA prior to applying for a Disability Retirement Pension from the Fund.
Eligibility for various types of pensions depends on a member's "Shifts of Service" per "Accrual Year." The "Accrual Year" is defined as the year from February 1 to the following January 31. An employee who works one hundred "Shifts of Service" within any Accrual Year is credited with a "Year of Vesting Service" for that year. An ...